What Is Economies of Scale?
The video defines economies of scale as the cost of each unit falling as you produce more.
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1.What do economies of scale mean?
The video defines economies of scale as the cost of each unit falling as you produce more.
2.In Leo's bakery, which costs stay the same whatever the output?
The 600 a day for rent, the oven and insurance is fixed; flour and energy at 1 per loaf are variable.
3.What is the cost per loaf when Leo bakes 200 loaves?
600 plus 200 is 800, and 800 divided by 200 loaves is 4 per loaf, not half of 7.
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Education only. Not financial advice.